LONDON -- Now that the U.K. government has all but nationalized two of the country's largest banks as part of its bailout plans, the focus is turning to one major bank that has vowed to avoid the state's embrace: Barclays PLC.
In coming days, Barclays executives will begin talks with officials and major shareholders to determine whether the bank will take part in the government's asset-insurance plan, say people familiar with the matter. The cost of the plan, which is aimed at restoring confidence in banks by putting a lid on their losses, has already forced Lloyds Banking Group PLC and Royal Bank of Scotland Group PLC to give up big ownership stakes to the state.
JOHN VARLEY
Analysts say Barclays could choose to insure some £50 billion, or about $70 billion, in assets. That would be much less than Lloyds and RBS, which have insured a total of about £600 billion under the plan.
So far, Barclays has fared better than most of its U.K. peers, putting it in a relatively good position to avoid government control if it decides to take part in the insurance plan.
RBS and Lloyds, both of which reported heavy losses for 2008, had to issue shares to the government to cover the fee for the insurance and to boost their capital levels, which fell when they agreed to accept a "first loss" on the insured assets.
Barclays, by contrast, might be able to pay its participation fee in cash: It has already raised capital from private Middle Eastern investors, and posted a net profit of £4.38 billion for 2008 despite £8.05 billion in losses on bad loans and other souring investments.
While some analysts have questioned whether Barclays is financially healthy enough to avoid any government ownership, Chief Executive John Varley said last month that he is "completely confident" that won't be necessary.
Analysts say Barclays would likely insure a much smaller pool of assets than either RBS or Lloyds, since its credit-card and other unsecured-loan portfolios, as well as its corporate commercial-loan books, are of better quality.
Barclays has some £56 billion in other, riskier assets that could be candidates for the plan, according to analysts at J.P. Morgan. The assets include securities backed by subprime mortgages, complex debt pools known as collateralized debt obligations, and £7 billion in so-called leveraged loans, according to J.P. Morgan.
The size of the pool to be insured would be decided after Barclays begins negotiating with the government, which could happen as early as this week, people close to the matter said.
—Dana Cimilluca contributed to this article.
In coming days, Barclays executives will begin talks with officials and major shareholders to determine whether the bank will take part in the government's asset-insurance plan, say people familiar with the matter. The cost of the plan, which is aimed at restoring confidence in banks by putting a lid on their losses, has already forced Lloyds Banking Group PLC and Royal Bank of Scotland Group PLC to give up big ownership stakes to the state.
JOHN VARLEY
Analysts say Barclays could choose to insure some £50 billion, or about $70 billion, in assets. That would be much less than Lloyds and RBS, which have insured a total of about £600 billion under the plan.
So far, Barclays has fared better than most of its U.K. peers, putting it in a relatively good position to avoid government control if it decides to take part in the insurance plan.
RBS and Lloyds, both of which reported heavy losses for 2008, had to issue shares to the government to cover the fee for the insurance and to boost their capital levels, which fell when they agreed to accept a "first loss" on the insured assets.
Barclays, by contrast, might be able to pay its participation fee in cash: It has already raised capital from private Middle Eastern investors, and posted a net profit of £4.38 billion for 2008 despite £8.05 billion in losses on bad loans and other souring investments.
While some analysts have questioned whether Barclays is financially healthy enough to avoid any government ownership, Chief Executive John Varley said last month that he is "completely confident" that won't be necessary.
Analysts say Barclays would likely insure a much smaller pool of assets than either RBS or Lloyds, since its credit-card and other unsecured-loan portfolios, as well as its corporate commercial-loan books, are of better quality.
Barclays has some £56 billion in other, riskier assets that could be candidates for the plan, according to analysts at J.P. Morgan. The assets include securities backed by subprime mortgages, complex debt pools known as collateralized debt obligations, and £7 billion in so-called leveraged loans, according to J.P. Morgan.
The size of the pool to be insured would be decided after Barclays begins negotiating with the government, which could happen as early as this week, people close to the matter said.
—Dana Cimilluca contributed to this article.
når ens aktie stiger 12% og der stadig er mindst 25% op til at investeringen kunne katagoriseres som katastrofal.....
Barclays 'considering' assets guarantee but no talks
Nick Goodway, Evening Standard
10 March 2009, 2:16pm
Data
Formal talks between Barclays and the Treasury have yet to start over whether or not the bank will take advantage of the Government's offer to guarantee toxic assets.
Barclays is widely expected to follow rivals Royal Bank of Scotland and Lloyds Banking Group in using the Asset Protection Scheme, but probably to a much lesser extent.
Between them RBS and Lloyds have insured almost £600bn of bad loans and investments. Barclays could go for just a tenth of that figure.
But despite suggestions to the contrary, Treasury officials and Barclays executives have yet to start thrashing out details. 'There will be an engagement,' said one source. 'But nothing has started yet.'
In the meantime Barclays shares shot up today, rising 10.5p to 71.9 as respected banking analyst Jonathan Pierce said he expects them to outperform and set a price target of 110p. He said the protection-scheme agreements by RBS and Lloyds provide welcome clarity, while believing that their shares are not yet cheap enough to buy.
Barclays is 'the most interesting of all the UK banks,' Pierce says. But he also feels it will have to strengthen its balance sheet by issuing new capital.
Against the view of many, Pierce reckons Barclays could go the same route as RBS and Lloyds and issue B shares to the Government. 'Barclays is likely to resist Government involvement, economic or otherwise,' he says. 'But it is reported to be considering the Asset Protection Scheme, which places restrictions on executive compensation even without a capital issue.'
That would enable Barclays to avoid triggering clauses in its deals with backers from Qatar and Abu Dhabi, which prevent their holdings being diluted by any new share issues before June. Any B shares issued to the Government would have a far higher conversion price than today's - even higher, perhaps, than the price the Middle Eastern investors paid.
The Treasury deadline for banks to take advantage of the Asset Protection Scheme is the end of this month. It now looks likely that Barclays could take its discussions right to the wire.
Nick Goodway, Evening Standard
10 March 2009, 2:16pm
Data
Formal talks between Barclays and the Treasury have yet to start over whether or not the bank will take advantage of the Government's offer to guarantee toxic assets.
Barclays is widely expected to follow rivals Royal Bank of Scotland and Lloyds Banking Group in using the Asset Protection Scheme, but probably to a much lesser extent.
Between them RBS and Lloyds have insured almost £600bn of bad loans and investments. Barclays could go for just a tenth of that figure.
But despite suggestions to the contrary, Treasury officials and Barclays executives have yet to start thrashing out details. 'There will be an engagement,' said one source. 'But nothing has started yet.'
In the meantime Barclays shares shot up today, rising 10.5p to 71.9 as respected banking analyst Jonathan Pierce said he expects them to outperform and set a price target of 110p. He said the protection-scheme agreements by RBS and Lloyds provide welcome clarity, while believing that their shares are not yet cheap enough to buy.
Barclays is 'the most interesting of all the UK banks,' Pierce says. But he also feels it will have to strengthen its balance sheet by issuing new capital.
Against the view of many, Pierce reckons Barclays could go the same route as RBS and Lloyds and issue B shares to the Government. 'Barclays is likely to resist Government involvement, economic or otherwise,' he says. 'But it is reported to be considering the Asset Protection Scheme, which places restrictions on executive compensation even without a capital issue.'
That would enable Barclays to avoid triggering clauses in its deals with backers from Qatar and Abu Dhabi, which prevent their holdings being diluted by any new share issues before June. Any B shares issued to the Government would have a far higher conversion price than today's - even higher, perhaps, than the price the Middle Eastern investors paid.
The Treasury deadline for banks to take advantage of the Asset Protection Scheme is the end of this month. It now looks likely that Barclays could take its discussions right to the wire.
